You're confusing two different questions.
Which country does it belong to, is a matter of politics and who claims what country. Most countries put the Israeli border at the so-called green line, which is based on the 1967 border.
What isn't deniable, is that Palestinians who live in the area are cleared away to make way for Israelis transferred by the Israeli government as part of a state-run settlement program. That's the war crime, the violation of the Geneva convention, and the problem.
Israel is trying to have it both ways, clearing the land for use by its citizens, but not claiming the land so that the Palestinians aren't part of their country. Either Israel is the country portrayed in the second picture (1967), and it is illegally Occupying its neighbour, stealing land and resources. Or it is the country in the third picture, in which case it isn't a democracy at all, but rather an apartheid state bombing and brutally repressing it's own citizens for the crime of being the wrong religion/ethnicity. Since Israel has always claimed to be Occupying the West Bank, rather than adding it to it's territory, its not a brutal and repressive apartheid state, but rather a democratic state brutally repressing its neighbour.
There is no way it can legally claim the land without claiming all the people.
Which is why it's in a dilemma. It can't both be Israel and keep the settlements. Unless the Palestinians can be cowed into accepting resettlement, concentrating them into smaller areas (camps), or into leaving the area voluntarily. Hence the restrictions on imports and exports, and the restrictions on Palestinians moving freely.